Personal loan advice

[C E Jones]

I'm considering taking out an unsecured personal loan for about $7500. I've never done this before and am looking for advice about pitfalls to look out for and recommendations for lenders with positive reps. I have good credit, and if it's relevant the loan is to pay for a used car and some other smaller purchases. Thanks in advance for any tips.

-cej

[boosami]

You can get a pre-approved used car auto loan at a much lower rate than an unsecured loan.

Used car loan: ~7%
Unsecured: ~10%+

[C E Jones]

You can get a pre-approved used car auto loan at a much lower rate than an unsecured loan.

Used car loan: ~7%
Unsecured: ~10%+

Thanks for your reply. I'm not buying from a dealership but directly from the owner, who wants cash upfront. Would an auto loan deliver the cash to my checking account, or would it be more like a financing thing?

[noppenbd]

I think the loan company will give you a check to purchase the vehicle. See:

https://www.eloan.com/s/show/autoexpectations?context=auto

[kork13]

I'm considering taking out an unsecured personal loan for about $7500. I've never done this before and am looking for advice about pitfalls to look out for and recommendations for lenders with positive reps. I have good credit, and if it's relevant the loan is to pay for a used car and some other smaller purchases. Thanks in advance for any tips.

-cej

You can get a pre-approved used car auto loan at a much lower rate than an unsecured loan.

Used car loan: ~7%
Unsecured: ~10%+

I believe companies will only lend you the sale cost of the car, so it wouldn't work to only use a car loan. If you want to use a loan to make "some other smaller purchases" (people here may likely recommend against it, depending on what those things are), you might be better served to get a used car loan for the car, and a personal loan for the rest, rather than a higher-interest loan (as boosami noted) for the car as well.

[boosami]

Right, a bank issued car loan would only cover the car... you can't get "cash back" except as a dealer incentive or some other kind of promotion.

Typically, you can get "preapproved" for up to a certain amount and the bank give you a blank check. (Plenty of banks will do this or a similar pre-approval for the loan.) When you and the seller settle on a price, you fill in the amount and give him the check.

A private seller might not accept a personal check, but he should accept a bank check.

I'd go to your bank and say you'd like to get pre-approved for a used auto loan, and at the same time apply for an unsecured line to cover your other expenses. That way, you're only paying the extra interest on what you have to.

[maat55]

You might try a HEL, it has a lower interest rate, you can write off the interest and use the money however you want. I personally, would not borrow money to buy things that go down in value.

[boosami]

I personally, would not borrow money to buy things that go down in value.

Wish I had thought of that before buying my latest property...

[maat55]

Wish I had thought of that before buying my latest property...

Same with securities, I wonder if anything is going up in value.

[disneysteve]

Same with securities

Most of us haven't borrowed money to buy securities.

[maat55]

Most of us haven't borrowed money to buy securities.

I was associating securities with things you buy to go up in value, like a house. I don't borrow to purchase securities. I wonder how many people are in trouble from buying on margin?

[disneysteve]

I was associating securities with things you buy to go up in value, like a house. I don't borrow to purchase securities. I wonder how many people are in trouble from buying on margin?

I bet a lot of investors got margin calls in the recent decline.

[Abiqua]

I know that capital one, in the past, had a "blank check" loan service that I was going to use. Someone described it in an earlier post. You apply for a certain amount, specify that you're buying from a private seller, and they send you a blank check that you can write for up to the amount they approve.

[ceejay74]

I've got a personal loan with Capital One and it's fine. The int. rate is 8.99%, not great, but I like it better than a credit card debt because it's a 5-year payoff term, not virtually indefinitely like credit cards. I'm trying to pay it off sooner than 5 years though!

[Ownerfinance]

Thank you for sharing useful information.We haven't been in this situation but it sounds like they are right unfortunately unless you took out some sort of protection on the loan? We would speak to citizens advise... they would be able to point you in the right direction.